A group of servants sent from Timon's creditors gather outside his house, waiting for him to emerge. They greet each other, and note that it's strange that one of the servants has been sent to collect money from Timon, while his master wears enormous jewels recently given him by Timon. The servants find it odd that Timon's friends should demand their loans paid back when they still enjoy Timon's gifts. The servants know their lords have sucked up Timon's bounty and now, even worse, have no gratitude for the generosity he showed them in days past.
Flaminius and Flavius enter, and the servants demand to know the whereabouts of Timon. Flavius asks them why they didn't bring out their bills of debt due when their lords were enjoying the bounty of Timon's table, instead of presenting them when Timon's luck has turned. Flavius angrily departs. Servilius enters, and the servants assault him with questions, but he explains that Timon has been taken ill.
Yet Timon bursts from the house in a rage. He shouts angrily that he has always been free, why should he now be constrained within his house, why now is mankind so cruel to him? Each of the creditor's servants then present their bills, swarming around him. Timon is horrified, and rushes back inside the house, while the servants wonder if their masters may be better off giving up on collecting their money.
Inside the house, Timon speaks to Flavius, and suddenly thinks of a plan. He orders Flavius to organize another feast. Flavius says no money remains for a feast, but Timon tells him not to worry. He sends Flavius to invite everyone.
Meanwhile in the Senate House, several senators discuss the fate of a man. Alcibiades enters and pleads for his friend. His friend, he says, is an honorable man who acted foolishly out of passion, and asks that he be freed. One senator replies that Alcibiades speaks as if he's trying to make manslaughter legal. Revenge is not a valorous action; rather, learning to bear slights and suffering is preferable, says the senator. Alcibiades then speaks as a soldier, to whom slights mean action. If bearing suffering is valorous, does that mean prisoners are wiser than those who judge them? Alcibiades begs that they consider his friend acted rashly, but doesn't everyone sometimes do the same?
The senators say Alcibiades's efforts are in vain. Alcibiades insists that his friend's actions for Athens on the battlefield should be sufficient payment for his freedom. The senators condemn Alcibiades's friend to death, but Alcibiades offers his own achievements as further barter for his friend. The law, he declares, is just as strict as war, and they both have succeeded at war. Alcibiades begs them to reconsider his requests. But the senators are now provoked, and they banish Alcibiades.
Alcibiades, alone, is enraged. He has fought hard for Athens, only to be banished. He says he's nearly glad to leave Athens, for now he can gather his troops and strike at Athens. Soldiers should not endure such wrongs, he declares.
The servants outside Timon's door all appear to have more capacity for pity than any of their masters, for they all remark on the injustice of their masters calling Timon's bills due, when the loans originated to pay for gifts for their masters. Yet Timon's former friends ignore Timon's kind intentions, they forget his gifts, and turn on him. Yet even though the servants seem to understand the injustice of Timon's position, they still swamp him with their bills and drive him into his house!
Timon plans to confront his former friends by throwing another feast, a feast that will be memorably different from the bounty and generosity that marked his prior festivities. Timon had at first believed his friends would help him through rough times, but when they refused, his rage was provoked. Learning swiftly from his mistakes, he becomes a wholly different man.
The secondary plot of Alcibiades's banishment is not well developed; apparently a friend of his has killed someone in what appears to have been a momentary rage, and has been sentenced to death. But while arguing for his release, Alcibiades annoys the senators to the point of banishing him. Alcibiades declares that he will raise an army to take Athens, which will prove helpful to Timon's cause later in the play. Alcibiades too has been one of Timon's friends, but apparently his involvement in this trial hinders any aid he might have offered to Timon, until later.